Federal prison ordered for former Janesville tax preparer

MADISON--A former Janesville tax preparer who filed dozens of phony tax returns to defraud the state and federal governments out of $224,293 was sentenced Wednesday to 2˝ years in prison and ordered to make restitution.

Rosella Collins, 45, worked as an independent tax preparer who, unbeknownst to her clients, fraudulently claimed deductions and exemptions that inflated refund amounts on tax returns she filed for her clients.

Collins gave her clients returns that claimed reasonable refunds but filed phony returns seeking greater refunds. She directed the IRS to split the refunds, electronically depositing in the clients' bank accounts the amounts the clients expected and depositing in her account the balance of the inflated refunds.

A Janesville man helped uncover Collins' scheme when he contacted the IRS in 2008 about a stimulus check he hadn't received. An investigation uncovered the check had been deposited in an account Collins established in California, Assistant U.S. Attorney Kevin Burke said.

Collins was indicted for filing 10 fraudulent returns between April 2007 and March 2009. An investigation showed she had perpetuated the scheme on 48 returns over a number of years, Burke said.

While the offenses were subject to a six-year statute of limitations, District Judge Barbara Crabb could consider all uncharged conduct in sentencing.

On Wednesday, Collins' attorney sought a one-year sentence. She said her client got caught up in the scheme after working hard for years but living beyond her means.

Collins and her husband of 20 years moved to Florida in 2009 and bought a flower shop there but couldn't pay all their bills. Collins turned to credit card fraud and issuing worthless checks to meet her financial obligations. She was convicted in Florida and sentenced in March 2012 to three years in prison, according to court documents.

Burke on Wednesday sought a sentence of 24 to 30 months, citing Collins' history of financial fraud to obtain money without regard to the harm she causes others.

Collins told Crabb that since getting caught she has learned how “arrogant, bossy and downright ignorant,” she had been. Her crimes were caused by her fear of failing at business and the resulting humiliation. Now, she said, she wants to “right my wrongs.”

Crabb said she doubted Collins could.

“Your life has been a long, steady period of defrauding and deluding people, taking what you can get for your own advantage. A lenient sentence now is not good; there are too many victims,” Crabb said.

Crabb made Collins' federal sentence consecutive to the balance of her Florida sentence and ordered her to pay restitution of $194,808 to the IRS and $29,485 to the Wisconsin Department of Revenue.